4 reasons why a bad economy is good for Brooklyn real estate

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For
reasons relating mostly to resources, BrickUnderground doesn’t cover Brooklyn
as much as we would like, which is too bad, because there is, obviously, a lot
of interesting stuff going on real-estate wise.

Square
footage is an obvious answer--space is cheaper in Brooklyn. Condos, for example, sold for an average of $697 per
square foot last quarter versus $1,233 in Manhattan, according to the Elliman reports.

But
that's not the whole story. If you speak to Brooklyn brokers, like we did, you'll hear that what’s going on in the borough is more like a perfect economic storm.

1. 718 is head of the middle class

With
tuition at private schools more out of reach than ever for
many parents, the hunt is on for highly-rated public schools in relatively
affordable neighborhoods.

District 15, which includes the neighborhoods of Park Slope and
Windsor Terrace, has some of the most sought after and competitive public schools
outside of the Upper East Side’s Gold Coast.

“Family-sized
two- and three-bedroom apartments in the area are almost always in high demand
and rarely sit on the market for very
long,” Paul Paglia of Brooklyn-based Garfield Realty explains. “In fact, buyers
will often tailor their search based solely on the reputation of a particular
program, sometimes forcing over-crowding and wait-listing in the earliest
grades.”

And
while some may balk at the lengths people will go to get their kids into the
right schools, Paglia knows the power of the right zip code.

“I've
heard of parents going so far as to bribe landlords to ‘purchase’ a ‘mailbox’
to get their children enrolled in some of the more elite public programs.”

2. Mom-and-pop macchiatos go
down easier

Congress’
futility in creating jobs and improving infrastructure has potential homebuyers
a little less confident about the future of neighborhoods dependent on the
opening of big chains like Fairway and Marshalls (Harlem) or the 75-years-in-the-making
Second Avenue subway line (Yorkville).

But
demand seems to have gotten stronger in self-contained, small-business oriented
neighborhoods with destination eateries and boutiques.

“I
don’t feel like my corner café is going to sneak out like a thief in the night,
because it’s a family-run business that’s been in the neighborhood forever,” says
Alitza Wellstead, who recently moved from the Upper East Side to Kensington. On the other hand, she says, “I know Starbucks
wouldn’t owe us anything.”

3. Wait, we can afford radiant
bathroom tiles?

First-time
buyers who have been priced out of predominantly co-op Manhattan are finding
more than what they thought they could afford with the explosion of Brooklyn
condos.

“Nowadays
co-ops have stricter debt-to-income ratios and require more liquidity after
closing,” Jeffrey Nolan of Corcoran says, “so while co-ops appear less
expensive based on price-per-square foot, they may now require more income and
more liquid assets than a condo.”

In
addition, co-ops in Manhattan typically have higher common charges than both
co-op and condo options in Brooklyn. This is especially true when factoring in
new development condos in Brooklyn with tax abatements.

A
lot of these new developments are also in comparably safer and more convenient
areas (like Park Slope’s 4th Ave or Greenpoint) than what the same
money would buy in Manhattan.

“A
new development condo buyer in Brooklyn will be picking up roof decks with
great city views, fitness centers, less expensive parking and the new
development look and feel that many co-ops in Manhattan do not offer,” Nolan
explains.

4. Rooms with a view

Things
may be looking up in Brooklyn in part because you can do that exactly: Look up.

In
a bull market, having light and views in NYC are seen as a luxuries that come
after basics like location and affordability.

But
in a post-bull-market of super-picky buyers with increased options and more
concern about resale and quality-of-life issues than ever, sun and skyline are
essentials.

It’s
easier to get both in Brooklyn since it isn't as built up as its East River
rival.

“I
took a Manhattan buyer to see the Rushmore and he didn't like the unit
because he felt like his views were of the other tower in his own
building,” says Alison Rogers of DG Neary Realty. “In contrast, you can go to
the new buildings in Williamsburg or Downtown Brooklyn and really get a sense
that the city is at your feet.”

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